Steve Moskowitz is losing his Oldsmobile franchise in suburban Chicago. But he is not giving up on General Motors. He is eagerly looking for a new GM dealership.
So far, though, he hasn't signed a deal. And there are no guarantees that he will.
GM says it wants to keep strong and loyal Oldsmobile dealers such as Moskowitz in the GM family when it kills the brand. It's clear, though, that GM can offer little beyond the cash buyout that is now on the table.
In short, GM still has too many dealerships, and Oldsmobile dealers are victims of a classic shakeout that has been building for decades.
Here is the dilemma:
GM has too many dealers and virtually no open points to hand out to Oldsmobile dealers.
Oldsmobile dealers could buy other GM dealerships. But that is a slow process because brokers say few dealers want to leave the business.
Dealers who are willing to sell their dealerships expect high prices because large chains drove up prices in the late 1990s. Prices are drifting down, however.
GM will refer Oldsmobile dealers to its overseas-based partners, such as Saab and Subaru. But those brands say they have few franchises available.
Darwin Clark, general manager of industry-dealer affairs at GM North America, is trying not to raise false hopes. Clark said GM is exploring 'as many opportunities as possible' for its Oldsmobile dealers.
But he said: 'We have 2,801 Oldsmobile dealerships. It's clear we don't have 2,801 opportunities. One of the worst things we could do is to overpromise and underdeliver.'
Moskowitz, 52, owns Classic Oldsmobile, which was founded in 1923 and is the oldest business in Merrillville, Ind. He has 37 employees. Last year, he sold 347 new Oldsmobiles. Classic is one of 63 dealerships in the United States that sell only Oldsmobile.
Under the buyout formula, GM is offering exclusive Oldsmobile dealerships up to $3,100 for each new Olds sold in their best year of the last three. So an exclusive dealer with 500 new-car sales would get up to $1.55 million.
In love with Oldsmobile
Moskowitz was so enthusiastic about Oldsmobile that he spent some of his own money to build a replica of its first race car, the 1903 Pirate. During Oldsmobile's 100th anniversary in 1997, he pieced together the design from surviving photos of the original, which raced on the sands near Daytona Beach, Fla.
Moskowitz was rocked by GM's decision to kill Oldsmobile, which was announced Dec. 12.
'I'll never be the same person because my whole identity is Oldsmobile,' he said.
He is seeking another GM store.
'I don't know any (Oldsmobile dealers) who want to get out,' he said. 'All want to stay in GM. We were taught to be team players. We'll try to carry on.'
However, he said the Chicago area has 13 stand-alone Oldsmobile dealers. Moskowitz must compete with those dealers for available stores.
Many mouths to feed
Besides competing with their fellow dealers for new stores, two other issues are complicating Oldsmobile dealers' efforts to land on their feet.
First, GM is seeking dealerships for minority dealer candidates, increasing competition for available stores. Clark said GM is balancing the needs of Oldsmobile and minority candidates.
Second, Clark said about one-third of Oldsmobile dealers have signed so-called exclusivity agreements, under which they are prohibited from selling non-GM makes.
Will GM now allow Oldsmobile dealers to pick up a non-GM franchise? Clark said that issue is under study.
Up in the air
Dealer Annette Ganassi, who owns an Oldsmobile-Pontiac-GMC store in suburban Pittsburgh, does not know how she'll replace her Olds business.
Oldsmobile accounted for 34 percent of her 500 new-vehicle sales last year, so she needs to plug that gap. But Pennsylvania, which, she said, has 1,400 dealerships, is an 'extremely overdealered market.'
For now, her plan is to push her sales staff to sell her remaining lines, particularly GMC medium-duty trucks.
GM has said it will pass along to its overseas affiliates information about worthy Oldsmobile dealers. But again, opportunities are limited.
For instance, Saab has about 205 dealerships in the United States, which Dan Chasins, president of Saab Cars USA Inc., called 'about the right number for us.'
He said GM, which owns Saab, supports Saab's 'market-area approach,' which reserves a certain territory for each dealership. So he sees no change that would make more Saab franchises available.
At Subaru, spokesman Thomas Johnson said his company has no plans to expand its number of dealerships beyond the current 600.
So, dealers such as Moskowitz face uncertain prospects. He says if he can cut a deal to buy another dealership, 'GM will move quickly on it.'
But Moskowitz is losing sleep. 'I was up at 3 a.m. the other night, wondering: `How can I pull this off?' ' he said.
'It's not just for me, but for all of my employees, too.'